This is one I made a note to circle back to after reporting season. Used to be Corum Group but recently got renamed to align to its remaining products in market after selling its pharmacy software business.

What's to like:

• Profitable (after backing out discontinued operations)
• Growing revenue
• Improving gross margin
• All while reducing operating expenses
• Solid free cashflow
• Difficult to find operating metrics of the remaining business that aren't moving in the right direction
• Heaps of cash, no debt

Sounds great, it must be expensive. Its market cap is $17 million but it has net cash of $12 million and so an EV of just $5 million. If you annualise the half year result it is on an EV/EBITDA ratio of 2.5!

What gives? Well one of the reasons for the significant cash pile is it won $8.1 million in the Victorian Supreme Court last year in a case against Fred IT Group. Despite Fred paying the damages, the ruling has been appealed and is expected to be heard in a couple of months. That has led to an $8.1 million liability on the balance sheet and you have to put some weighting into the possibility it (and possibly additional costs) has to be returned to Fred.

It also has a new CEO, who was most recently COO at Douugh Ltd (ASX:DOU). I'm not sure that recommends him...

Plus, despite being profitable, it is tiny. Its two remaining technology offerings (both related to connecting pharmacies with their suppliers) collectively earnt $3.2 million in the half).

It does feel like in the short term there will be a fairly binary outcome, depending on the result of the court case under appeal, but it also feels like a lot of the downside of that has already been priced in. If you exclude the $8 million under appeal it's still only on an annualised EBITDA to EV multiple of 6.5. It might be one to do some more work on.

[Not held]